Nov. 27 (Bloomberg) -- Robin Young of Amur Minerals Corp.
wants to dig for nickel and copper in Siberia where forbidding
winters and poor roads make it tough to haul in equipment. His
best option: fly it in with zeppelins.

Otherwise the London-traded explorer would have to spend
about $150 million building a 350-kilometer (218-mile) road to
truck in heavy construction gear, Chief Executive Officer Young
said in an interview. Peter Hambro, executive chairman of gold
producer Petropavlovsk Plc, said he invested in a maker of the
airships and foresees the mining industry adopting them.

“To build a bridge to take a Toyota Land Cruiser isn’t
horrifically expensive,” Hambro said. “To build a bridge that
will take a Caterpillar 777 is very, very expensive,” he said,
referring to the 87-ton dump truck used in mines.

Zeppelin and blimp manufacturers need mining contracts to
creep back to life, 76 years after the Hindenburg burned and
crashed in New Jersey, ending most buyer interest for decades.
With better designs and a buoyant gas that can’t ignite, makers
such as Worldwide Aeros Corp. and Hybrid Air Vehicles of the
U.K. say they’re negotiating their first sales to the $960
billion mining industry to complement truck and rail transport.

So far, rejections have been plenty. OAO GMK Norilsk Nickel
looked at zeppelins to transport equipment to build a mine in
Siberia a decade ago and decided instead to use conventional
airplanes. It later built a fleet of icebreaker vessels to ship
its nickel out through the Yenisei River in Russia’s far north.

Considering Zeppelins

Polyus Gold International Ltd., the largest Russian gold
producer, has considered using the zeppelins as an option to
deliver heavy equipment to its Natalka project in the country’s
far east, spokesman Sergey Lavrinenko said. “It was rejected,
though, as at the time we couldn’t find a suitable offer on the
market.”

About 10 years ago Hybrid Air of Cranfield, England, built
its first blimp, which unlike a zeppelin, doesn’t have an
internal frame. It was to be used for advertising and
documentary filming. The company sold its second airship, with a
5-ton cargo capacity, to the U.S. Army for surveillance in
Afghanistan though the army is returning it in December because
of budget constraints.

Petropavlovsk’s Hambro said he would consider ordering one
in the future for his business in Russia’s far east. Hybrid Air
has developed and tested its non-rigid craft capable of
performing in storm winds and conditions typical of Siberia and
the Canadian tundra, spokesman Chris Daniels said. Those are the
most likely regions where a lighter-than-air vehicle might get
used.

Flight Certification

To be sure, both Hybrid Air and Worldwide Aeros need to
pass flight tests to get authority to fly their airships. Hybrid
Air is expecting to get its certification within two to three
years, Daniels said.

Hybrid Air is in talks with two companies that supply
transport services to mining companies in Canada and expects to
sign orders in the next couple of months for delivery as early
as 2016, Daniels said. The airship will contain a rigid
structure underneath the inflated canopy to carry 48 passengers
and the cargo, he said.

For investors, the option of an explorer like Amur using an
airship rather than raising funds to pay for a road before
starting production is attractive, said John Meyer, an analyst
at SP Angel Corporate Finance LLP in London.

Better Airships

“Amur’s project has a huge value, but the upfront funding
and the fact it’s in Russia means that it’s difficult to
finance,” Meyer said. “The ability to use an airship will
completely transform the value of the company. They can start
producing before spending all that extra money.” Amur, based in
the British Virgin Islands, is named after the region of Siberia
where it explores for nickel and copper.

There are only about a dozen blimps and zeppelins flying
worldwide and most of them are used to float in the air for
several days for advertising or carry tourists in Germany,
according to Daniels.

Technological developments have helped manufacturers to
build airships with larger lifting capacity and the ability to
land and take off more often, he said. HAV is constructing a
400-foot blimp with a capacity to carry 50-ton cargoes.

HAV tested its 5-ton capacity airship in 70 mile-per-hour
winds and most of the company’s potential customers are in
Canada, Daniels said in an interview. The fuel costs are about
10 percent of a helicopter’s, he said. All lighter-than-air
vehicles built after the Hindenburg disaster in 1937, when the
airship’s hydrogen tanks caught fire killing 36 people, use non-flammable helium, he said.

Roadless Terrain

Worldwide Aeros is building airships about 500 feet long,
with a zeppelin-like rigid structure designed to carry loads as
heavy as 250 tons at speeds of more than 100 miles an hour,
according to CEO Igor Pasternak.

The aircraft can ferry mining equipment to roadless terrain
because they are light and can take off and land vertically,
said Pasternak, who moved his closely held company from his
native Ukraine to Los Angeles in 1994. Fuel costs are about a
third of a cargo plane, he said.

Worldwide Aeros is planning to build fleets of 24 zeppelins
to serve shipping industries, including mining, Pasternak said.
The company is negotiating with potential clients and receiving
their commitments to use the service, he said.

Worldwide Aeros will operate the airships, which will be
available for hire by customers, about a quarter of which are
mining companies.

Helium Shortage

“Anything that allows us to move heavy weights over
difficult terrain without spending a lot of money on the
infrastructure is attractive,” Petropavlovsk’s Hambro said.

Hybrid Air plans to develop its 50-ton capacity blimp with
with a price tag of about $30 million to $40 million each and to
follow this about two years later with 200-ton capacity
airships, Daniels said. Worldwide Aeros, which is testing its
66-ton capacity airship, is seeking to raise about $3 billion to
build the 24-strong fleet, with 20 of them having a capacity of
250 tons, CEO Pasternak said.

A shortage of helium has led to rising prices that could
pose difficulties for the blimp producers. Helium prices for
non-governmental use have increased by as much as 89 percent to
$6.13 per cubic meter in the past five years, according to U.S.
Geological Survey data.

The U.S., which in the 1920s sought to protect its helium
supplies to keep a steady use for military dirigibles, in the
1960s began storing the gas in an underground reservoir in Texas
after the blimp business didn’t take off as expected. The U.S.
has the world’s largest reserves of helium, followed by Qatar,
Algeria and Russia, according to the Geological Survey.

Oil Companies

Aeros’ 66-ton capacity airships would need about 6.7
million cubic feet of helium while the 250-ton ones will use
about 14 million cubic feet, according to the company.

HAV’s 50-ton capacity airships will contain about 100,000
cubic meters of helium, the company’s Daniels said. Global
consumption of the gas is 180 million cubic meters while total
reserves are about 50 billion cubic meters, he said.

Today high-tech companies and manufacturers including
General Electric Co., Siemens AG and Intel Corp., are among the
main helium consumers. GE uses helium to cool magnets on its
magnetic resonance imaging, or MRI, machines that provide
internal images of the human body while Intel uses it to make
computer processors.

The airships have potential for use in remote projects
beyond mining, SP Angel’s Meyer said today. “You can imagine
oil companies carrying rigs to site in this way, or power
companies carrying generators.”